Mitsubishi Tanabe Pharma Corp. is buying Israel-based Neuroderm Ltd., the developer of a belt-worn pump for the continuous delivery of liquid levodopa/carbidopa to treat severe Parkinson’s disease (PD), for $1.1 billion in cash, or $39 per share. The deal is expected to play a key role in helping the Japanese company reach its goal of earning ¥80 billion (US$719.5 million) in U.S. revenue by 2020, in part by expanding its U.S. neurology portfolio.
Mitsubishi Tanabe managers expect Neuroderm’s product will be able to “overcome major deficiencies in current treatments,” helping PD patients for whom oral levodopa is no longer effective in controlling motor complications of the disease. The product will also expand its neurology pipeline beyond Radicava (edaravone), its new amyotrophic lateral sclerosis therapy, for which U.S. approval arrived in May. (See BioWorld Today, May 9, 2017.)
Neuroderm shares (NASDAQ:NDRM) rose 15.5 percent Monday, closing at $38.35. Mitsubishi Tanabe shares (TSE:4508) fell about 1.1 percent during the Tokyo Stock Exchange’s Monday trading session.
The offer represents a premium of about 17 percent to Neuroderm’s closing stock price on Friday. A special meeting of shareholders to approve the transaction is expected to be held this fall, the companies said, with the transaction expected to close in October.
Jefferies analyst Peter Welford wrote that the deal price tag “fairly reflects the phase III execution, regulatory (notably drug-device challenges and U.S. orphan drug competition), and commercial launch risks.” In light of the significant premium offered and existing shareholder agreements, he added that “we regard a counter bid to perhaps be unlikely.”
Neuroderm CEO Oded Lieberman said Mitsubishi Tanabe’s commercial expertise in neurology and data supporting the product “will help make this important new therapy available as broadly and rapidly as possible.” BioWorld Asia was unable to reach Lieberman for further comment.
Neuroderm’s primary candidates are a line of levodopa and carbidopa (LD/CD) products administered through small belt pumps that deliver a continuous, controlled doses. The LD/CD product candidates, ND-0612L and ND-0612H, are aimed at the treatment of moderate and advanced Parkinson’s disease patients, respectively, and are delivered subcutaneously. Neuroderm is also designing a patch pump for future use.
In phase II data reported in March, ND-0612H was shown to significantly decrease the amount of time in which Parkinson’s disease patients faced a reemergence of PD symptoms on medication, eliminating it altogether for some patients. (See BioWorld Today, March 2, 2017.)
Phase III trials of ND-0612 are underway in the U.S. and Europe, putting the company on track to submit regulatory filings in both territories in 2018 ahead of an anticipated 2019 launch. In the U.S. the company is running the Beyond trial, testing the one-year safety profile of a high dose of the drug in about 150 patients.
In Europe, the Indigo trial is underway, testing both a high dose and low dose of the drug vs. placebo for 16 weeks, optionally extending to one year, in 240 PD patients.
If approved, the combination product would compete with existing drug treatments of Parkinson’s disease, including what the firm called in a recent regulatory filing, the “gold standard” of treatment for the past 30 years, oral administration of LD/CD. It might also compete with deep brain stimulation and Abbvie Inc.’s product, Duodopa (also known as Duopa), a LD/CD drug in a gel form administered directly into the duodenum via a surgically inserted tube, which is already approved in the U.S, Europe, Canada and Australia and generated $293 million in global revenues for Abbvie in 2016. Abbvie is also developing a liquid levodopa formulation for continuous subcutaneous administration.
Synagile Corp., of Wilson, Wyo., is also in the race, developing a new intra-oral semicontinuous delivery device for the administration of a liquid formulation of LD/CD ester. It raised $4.7 million in equity financing in January, but has published little about its progress this year.
In addition to ND-0612, Neuroderm is advancing ND-0701, an apomorphine-based candidate primarily for treating patients with severe PD who suffer from high motor fluctuations and who do not respond well to LD/CD, and ND-0801 (opipramol and nicotine), a transdermal patch for cognition disorders associated with CNS diseases.